Price and discount | Strategies for eCommerce companies
When you think about shopping, you have to decide whether to go to a physical store or do it online. As convenience is a key factor that determines our shopping techniques, we tend toward online shopping.
Online shopping has evolved into a multi-trillion-dollar industry. It is estimated that e-retail sales will grow to $6.3 trillion in 2023.
The key reason for the growth is the application of the right pricing strategies and discounts on online products to stay on top of the game.
Almost 90% of online shoppers are looking for great deals and discounts, and this leads to the majority of shopping happening online as compared to offline.
There are several factors for the growth of online shopping depending on the facts like the presence of more product information, personalized experiences, next-day delivery, free shipping, etc.
Table of Content
1. How do give products the right price?
It is essential to do your homework to set the right tone for your online product. High prices can lead to a shift of traffic to your competitor’s website. Low prices can impact the turnover of your brand, as well as any profit that is achieved.
The price of the product is set on the basis of production and business costs, revenue goals, and competitor pricing.
2. Price reduction is an effective tool
Price reduction plays a pivotal role in increasing sales. You can offer a discount and other promotions to bring traffic to your online store. Make certain that you have properly planned this.
If you have stubborn products in your warehouse, unload them fast; that can lead to cutting inventory storage costs. Almost 97% of eCommerce retailers use price reductions as a pricing strategy.
Make sure you do not face any rejection with the right product description and extend the time of exchange. This helps in developing the attachment of the customer to the product.
3. Use of discount codes
Discount codes are a great way to boost your average order value (AOV) and give you full control over your prices and promotions.
You can limit the duration of the discount code set on a specific product, which aids in faster uploading and can make the customer purchase right away. This is because there is a fear of missing out among customers.
A discount code helps protect your profit margin by considering the number of times this code can be applied. There are almost 24 million eCommerce sites across the globe, and each of them takes advantage of a discount code strategy.
Discount codes also sometimes lead to the sharing of codes by customers without your knowledge. Additionally, the discount code offers extra savings to the customer during the time of check-out. This can lead to more abandoned shopping carts.
4. Automatic price reductions
Your eCommerce platform must have native automatic discounting capabilities. Providing automatic discounts at the time of check-out enhances a better, and more satisfactory customer experience (CX).
Many online platforms have this facility, Shopify, and here you can also have the advantage of offering discounts with time restrictions, which always works.
Automatic price reduction assists you in realizing the value you receive after shopping with this particular brand.
It also highlights the original price on one side and the discounted price on the other, which leads to complete transparency.
You can also increase your sales and the flexibility of promotions by designing your discount strategy by adding a minimum purchase amount or quantity of items on specific products.
5. Sell products together at a reduced price
It is estimated that at least 21 percent of shoppers do research before purchasing an item online. Others simply go to all the websites and spend more time there. Ultimately, buy the item from the website that is offering it at a cheaper price.
Consider buying a game console for your child as a Christmas present. The variety of games available on a game console is what makes it so valuable. Many online retailers sell this game console together at a single, reduced price.
It is a beneficial strategy, as buying the game console separately can cost you more. This kind of offering directly enhances the opportunity of attracting heavy traffic to your website, along with the chances of customers buying more from your online store.
6. The psychology behind price
We all know that we are digitally growing at a faster rate. Along with that, the behavior of the customer is also changing at a faster rate.
People have supported online shopping for two reasons: convenience, and lower pricing. As it is said, some behaviors can never change, and the same is true for shoppers. We are more likely to purchase the same item from a website that offers it at a lower price than its competitor.
If the online product costs 2.57 US dollars and the same online product costs 2.56 US dollars, the customer will always prefer the latter. It is our human behavior that makes reduction by the factor of one also sound cheaper to us.
7. Define your unique selling proposition
There is something unique that every brand sells, and that is its unique selling proposition (USP). The USP is what distinguishes this brand from the competition. This is a way to communicate the values of your brand to your customers, along with added benefits.
A clear understanding of your USP helps in deciding the price of your online product. As that product is a limited edition and not available from any other brand, you can charge a premium price.
Final Thoughts
Experimentation is the only effective strategy. You are not aware of which of these above-mentioned strategies is the best fit for you.
Before applying any of these strategies, you need to experiment with your customers and get an idea of the price points they are comfortable with.
You can contact us if you need professional assistance with WooCommerce services, UX design, implementation, integration, or development.
